German rental house. Same tenants since 2014. Tenants noted water in basement and worsening mold this summer. Repair of several areas of basement walls AND mold remediation were needed. Very pricey b/c backhoe and sand blasting inside involved. 22,000 Euros, and while work being done additional problem area found; additional 3K. Total of 25K repair (rental income~ 11K) Tenants were living there while this was repair was being done. Does not change the utility of the basement (nothing but storage/laundry, Still areas w/ very old basement walls (~ WWII era) and original basement floor. Value of land the house sits on exceeds the house value/ nominal change to house value/ any buyer would raze the building and build modern. Does the extreme cost of the repair make IRS view it as improvement? or can I call this a loss this year?